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Engaging Essential Hospitals in Value-Based Care

In a new white paper, America’s Essential Hospitals discusses essential hospitals’ role in value-based payment models and makes recommendations to the Center for Medicare and Medicaid Innovation (CMMI) on improving equity through broader model participation.

Essential hospitals often serve as community anchors, with deep ties to the residents and a solid understanding of both clinical and nonclinical influences on patients and population health, making them an ideal candidate for value-based payment models. However, current models disproportionately penalize providers seeking to support patients’ broader health and social needs.

In the white paper, the association makes several federal policy recommendations to ensure health equity is a central feature and goal of value-based payment models and to encourage essential hospitals to fully participate in payment reforms. The recommendations call on CMMI to:

  • incorporate social determinants of health in risk adjustment methodologies and incentivize improvements in equity;
  • provide upfront funding to help essential hospitals build a solid foundation to help them thrive in new models, including in activities generally not reimbursed by Medicare;
  • address the needs of essential hospitals and their patients by creating models that reflect the full diversity of beneficiaries in the social safety net and by accounting for the unique characteristics of providers that serve as anchor institutions for their communities; and
  • address challenges in data collection and interoperability, particularly among providers serving marginalized people and people of color.

Contact Senior Director of Policy Erin O’Malley at or 202.585.0127 with additional questions.

About the Author

Abigail Painchaud is a policy associate at America's Essential Hospitals.

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